Jitney Jihad

The president of Yellow Cab, Joe Chernow, has a vision of what jitneys might bring to Houston, and it isn't pretty. Drawing on the experience of New York City, he sees dozens of aggressive, banged-up vans darting down Westheimer to beat out buses for passengers. He sees jitney operators abandoning their prescribed routes and becoming gypsy cabs, poaching on the livings of Houston's highly regulated taxi drivers.

Former cabdriver and jitney advocate Alfredo Santos has another vision. He sees dozens of small entrepreneurs operating their own vans and sedans on routes registered with the city. Like bus drivers who know the regular passengers on their routes, jitney drivers would develop a special relationship with their customers. By leafleting apartment complexes and talking to people in their neighborhoods, they would create new demand for their service, which would be more expensive than a bus but cheaper than a taxi. An energetic driver charging two dollars for a five-mile ride might bring in $200 to $250 a day, Santos theorizes.

Which vision will prevail may depend in part on a new city ordinance that will legalize jitneys for the first time since 1924. The jitney -- an archaic slang term for a nickel -- originated in Los Angeles with the growth of privately owned automobiles. Streetcar patrons at crowded trolley stops would jump on the running boards of a passing Model-T and pay a nickel to avoid the crowds and slow pace of the trolley. This unbridled capitalism spread all over the country, including Houston, cutting into streetcar revenues. With the streetcar companies threatening to raise fares, Houstonians voted to ban the practice in a 1924 referendum.

Last spring U.S. District Judge John D. Rainey ruled that Houston's 70-year-old no-jitney ordinance violated both the Sherman Antitrust Act and the 14th Amendment. Rainey's ruling came in response to a suit filed on behalf of Santos by the Institute for Justice, a libertarian legal foundation based in Washington, D.C. The foundation has successfully helped push the deregulation of taxicabs in Denver and Indianapolis, allowing more companies to compete.

The first draft of Houston's new ordinance, being reviewed by a City Council commission led by Councilman Al Calloway, has been designed to allow as many operators into the jitney business as possible. It proposes no restrictions as to the number of jitneys, where they may declare their routes or what they will charge. The vehicles must seat 15 passengers or fewer, be five years old or newer, be painted a specific shade of white and bear an illuminated jitney sign. They must be insured and inspected. The owners must declare a route and stick to it.

At a time when many businesses are howling against excessive government regulation, the taxicab industry wants more government control over its business, especially when it comes to opening up the streets of Houston. Chernow, a bearded, pipe-smoking CPA from Brooklyn, has developed an expertise in evaluating taxi franchises around the country. In the early 1980s, he and Yellow Cab successfully fought an effort by then-councilmember George Greanias to deregulate the taxi business. Chernow lobbied vociferously against the proposed changes, and Greanias couldn't muster any Council support. Like most businesspeople whose activities are regulated by the city, Yellow Cab officers contribute money to council campaigns. Chernow says he will meet individually with every councilmember to express his reservations about the jitney ordinance.

Yellow Cab controls about 60 percent of the 2,000 cab licenses in Houston. It is situated on five city blocks in the Fifth Ward just north of downtown, and recently invested in a $3.5-million computer system to help it dispatch its cabs. George Kamins holds controlling interest in the company, along with the Houston investment firm Equus. The company also operates American Cab in Austin and Yellow Cab in Colorado Springs, Colorado.

"Let me be blunt," says Chernow. "We're in the business. We understand ground transportation. The regulators are not in the business. They think if they write something down, it's going to be followed.

"Unless jitneys are restricted, they are going to become gypsy or illegal taxis. There may be hundreds of them running around Houston because there is nothing in the proposed ordinance that talks about a number or a restriction on routes. It says the guy is not supposed to deviate from the route that he files. Say you've filed your route and are running it, and it's raining, and your passenger says, 'Take me to my place three blocks away. Here's a buck. Who's going to see?'

"You know how many inspectors we have to control 2,000 taxis, 200 limousines and I don't know how many wreckers? There are six."

Enforcement problems aside, Chernow would like to see jitneys meet a test of "public convenience and necessity" that cab companies must meet to get new licenses. There is already an oversupply of cabs in Houston, he says, pointing to the three- and four-hour waits of cabbies at the airports. And Metro ought to have the right to approve or disapprove of a jitney route, he says.

Santos argues that entrepreneurs and the marketplace, not the government, should decide whether there is a demand for jitneys. Santos, 41, has spent more than ten years fighting for jitneys. A cab driver for ten years, Santos had seen jitneys working in Mexico City, where they are called peseros. Wearing a cowboy hat so potential passengers could easily spot him, he would drive East End streets holding out fingers for the number of places available in his cab. Yellow Cab found out about the practice and threatened him with the loss of his cabby's lease if he didn't go back to running his meter as required by law.

Santos calls his lawsuit a victory for the fundamental right to work.
"City Council can decide to create a thousand jobs without any taxpayer money," says Santos, an unsuccessful candidate in the January 21 election for an open City Council seat. "All this bureaucratic stuff Chernow wants to do doesn't make a lot of sense. This is free enterprise to the max."

Because the proposed ordinance requires jitney drivers to either own their vehicles or be employed by the owner, it locks Yellow Cab out of the jitney business. Yellow Cab drivers are independent contractors, who pay the company $70 a day to lease a cab. Some of the drivers are thousands of dollars in debt to the company, Santos says, and may never get out. He calls Yellow Cab "plantation transportation."

"If you ask cab drivers," Santos says, "most will say there are too many cabs. I disagree. It's not the supply, it's demand. There are not enough people calling."

Santos says jitneys will attract poor people and immigrants who don't own automobiles and are reluctant to call cabs because of the high cost and poor service. Chernow, however, says that about a third of Yellow Cab's trips originate in low-income, minority neighborhoods.

The secret to operating a jitney, Santos says, is to run the route religiously, make lots of quick trips, and develop new customers. Perhaps a driver will occasionally deviate to take a passenger home in a pouring rain, he concedes, or help someone get their groceries to the doorstep. But the driver will need to return quickly to the route to maintain the quality of the service.

If jitneys pose a threat to the city's bus service, Metro isn't letting on. This week it is requesting proposals from entrepreneurs to run jitneys on six five-mile-long segments of Bellaire Boulevard, Gessner, Martin Luther King, Airline and Westheimer. The cars or vans, to be labeled "FasTrak", will be subsidized at $25 a day, and will run during hours of peak service, says Jeff Arndt of Metro's service development department. At the end of a year, the experiment will be evaluated.

Since Metro operates under a separate authority from the city, it won't have to wait for the city to pass its ordinance, which should be sometime this spring. When that happens, Santos says he may be one of the first in line for a permit. He is writing a book about jitneys, and he doesn't want it to be strictly theoretical.